Google pays $500M to settle federal charges

Google has forfeited $500 million to settle US Justice Department charges that it helped Canadian pharmacies target US consumers through its AdWords product. The ads resulted in the “unlawful importation” of prescription drugs, according to the Justice Department.

Google knew in 2003 that Canadian pharmacies could not legally ship prescription drugs into the US, but the company helped them use its advertising product until 2009. At that point, it stopped allowing the targeting of US consumers through ads for prescription drugs, the Justice Department said in a statement.

“We banned the advertising of prescription drugs in the US by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place,” said a Google spokesperson, via email. The spokesperson added that “given the extensive coverage this settlement has already received, we won’t be commenting further.”

The Justice Department did not immediately respond to requests for comment.

US Deputy Attorney General James Cole said in a statement that the settlement is “one of the largest financial forfeiture penalties in history.”

Google revealed in a May regulatory filing that it had set aside $500 million of its first-quarter earnings for the Justice Department investigation.

The Federal Trade Commission (FTC) is investigating Google’s search and advertising business, both entities said July 24. The federal agency is looking into whether Google violated federal antitrust law, according to The Wall Street Journal.

Google settled charges with the FTC in March that it violated consumers’ privacy with the launch of its Google Buzz social product.

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